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The smiths are thinking about buying a rental unit that has the following cash flows. They want to know if this is a good investment.

The smiths are thinking about buying a rental unit that has the following cash flows. They want to know if this is a good investment.

Cost 250,000
Monthly Rent (2% annual increase) 1,600
Annual Expenses (2% inflation) $1,000
Annual appreciation 3%
The next best investment returns 10% 10%
They plan on keeping the property for five years then sell it. 5 yrs.
what is the Value of the house in five years? < use a future value calculation

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